Core retail sales fall for first time in a year in June

Retail sales were mixed in June, buoyed by strong auto and furniture sales but tamped down by high unemployment and taxes, analysts said.

The overall gauge of sales rose 0.4% from May following a revised 0.5% increase the previous month, according to the Commerce Department. The measure increased 5.7% compared with June 2012.

But Wall Street had expected a 0.8% boost, according to Credit Suisse. And a calculation of so-called core sales, which strip out the effects of auto and gas purchases, slipped 0.1% in its first decline in a year.

June benefited from strength in several sectors. Consumers rushed to buy cars and trucks, causing a 2.1% surge in auto purchases. They also began sprucing up their home interiors with furniture, sending sales up 2.4% after the category declined 0.4% the previous month.

Clothing stores, which had also suffered from a slow summer start, saw a 0.7% uptick in June.

But shoppers’ goodwill didn’t extend to home improvement brands, which had enjoyed bustling business in May as consumers began to take advantage of warmer weather. In June, sales for the building and garden sector slumped 2.2%.

“Even though healthy home prices and stock values are helping to improve confidence and spending, stagnantly-high unemployment, higher taxes and lingering policy uncertainty continue to keep shoppers and economic growth at bay,” Shay said. “The recovery is solid and good but its pace remains measured and modest.”